5.  The applicant was born in 1959 and was resident in Siltakylä at the time of his death.
6.  At the material time the applicant was the majority owner of a limited liability company providing bakery and café services. The company is not an applicant before the Court.
7.  In 1999 the Uusimaa Tax Office carried out a tax inspection of the company’s books for the years 1996-1998. The tax inspector interviewed the applicant and three persons who were working, or had worked, for the company: Mr T.L., Ms H.T. and Mr R.L. He drew up an inspection report dated 2 September 1999 and two inspection letters dated 6 September 1999. He found that there were deficiencies in the company’s book-keeping and that it had failed to enter as income part of the retail sales during the tax years 1996, 1997 and 1998. Basing himself on the company’s turnover, books and the remaining cash register printouts, he estimated the amounts at 140,000 Finnish marks (FIM), FIM 100,000 and FIM 130,000 respectively. He considered that the missing sales should be treated as disguised payments of dividends for the purposes of assessing the tax liability of both the company and the applicant and therefore the applicant’s estimated income should be increased by the above amounts.
8.  The Tax Office requested the company to submit its observations regarding the alleged errors in its tax returns for the fiscal years 1996-1998. In its observations of 23 August 1999 the company contested the allegation that certain sales had not been entered in the books. On 24 September 1999 the company and the applicant submitted their joint observations maintaining that all sales had been entered in the books and that the applicant had not received any disguised payments of dividends.
9.  The decisions taken in respect of the applicant’s increased tax liability are mentioned below.
10.  On 10 and 22 November 1999 the Tax Office increased the applicant’s estimated income for the above-mentioned years by FIM 129,000, FIM 90,000 and FIM 130,000 respectively. Following a rectification of the applicant’s tax liability, the amount of the disguised payments of dividends was reduced to FIM 121,000 for 1998. Tax surcharges of FIM 5,000 and FIM 3,000 were imposed on the applicant for the years 1996 and 1997.
11.  Following the applicant’s requests, the Tax Rectification Board, on 31 May and 20 July 2000, partly upheld his claims for reductions. It reduced the disguised payments of dividends to FIM 85,000, FIM 60,000 and FIM 85,000 for the tax years 1996 to 1998. It also reduced the amount of tax surcharges for the years 1996 and 1997 to FIM 4,000 and FIM 2,000 respectively.
12.  The applicant appealed to the Administrative Court, requesting an oral hearing of his evidence and that of witnesses Mr T.L., Ms H.T. and Mr R.L. proving that the company had not made any sales that had not been entered as income and that the applicant had not received any benefits which could be considered disguised payments of dividends.
13.  The Tax Office obtained the observations of the Tax Ombudsman, the written statement of the Tax Office and the applicant’s observations in reply.
14.  On 13 June 2001 the Administrative Court rejected the request for an oral hearing. It reasoned:
“The Administrative Court considers that an oral hearing is manifestly unnecessary having regard to the evidence submitted to it and the nature of the case. The case can thus be decided without an oral hearing.”
The court also rejected the appeal, giving the following reasons:
“The amounts of money which the applicant is considered to have received by way of disguised payment of dividends
On the basis of the circumstances observed during the tax inspection, not all the company’s sales have been entered in the books. In estimating the amount of the missing sales, the documents in the tax inspection file show that the Tax Office has already taken into consideration the company’s statement of errors entered in the cash register. In its decisions the Rectification Board partly upheld the company’s claims and reduced the estimated amounts of disguised payments of dividends accordingly.
The applicant was the majority owner of [the company] and, up until 2 December 1998, Chairman of its Board. He worked for the company full time. He counted the contents of the cash register daily and was responsible for sending the money to the bank. In addition, he took care of the company’s purchases, payment of salaries and all money transactions. Therefore, and as there is no suggestion to the contrary, the sales which have not been entered in the books can be considered to have been used by the applicant for his own benefit. As the applicant, for reasons referred to in section 57 of the Taxation Procedure Act, has failed to declare part of the income for the tax years 1996 to 1998, which has consequently not been subject to taxation, the payment of the taxes not claimed has had to be ordered in a reassessment procedure. The increase in the applicant’s income by way of disguised payments of dividends to FIM 85,000, FIM 60,000 and FIM 85,000 respectively for the tax years 1996-1998 cannot be considered too high. As the applicant must be considered to have produced, knowingly or through gross negligence, false tax returns concerning the afore-mentioned years, tax surcharges have also had to be imposed. The tax surcharges concerning 1996 and 1997 cannot be considered excessive. There is no reason to alter the Rectification Board’s decision on the basis of the appeal.”
15.  On 9 August 2001 the applicant requested leave to appeal. Should the Supreme Administrative Court not find it possible to alter the decision, he requested that the case be sent back to the Administrative Court for an oral hearing. On 8 March 2002 the Supreme Administrative Court refused leave to appeal. It reasoned:
“The applicant’s appeal concerns disguised payments of dividends added to his income by way of reassessment. There is no reason to bring the case before the Supreme Administrative Court in the interests of the application of the law in other similar cases or the uniformity of legal practice. Nor has there been any manifest error in the examination of the case. There are likewise no pressing economic reasons to grant leave to appeal. Since none of the grounds for granting leave to appeal laid down by section 70 of the Taxation Procedure Act applies, the Supreme Administrative Court refuses to grant leave to appeal and therefore will not rule on the applicant’s appeal.”